Agricultural Marketing Service, USDA.
Pursuant to the Pork Promotion, Research, and Consumer Information Act (Act) of 1985 and the Pork Promotion, Research, and Consumer Information Order (Order) issued thereunder, this final rule specifies requirements concerning paying and collecting feeder pig and market hog assessments in the regulations. This action adds a section to the regulations which implement the Order to provide that the producer who sells the animal must remit to the National Pork Board (Board) the assessment due if the purchaser of a feeder pig or market hog fails to collect and remit the assessment.
March 15, 2000.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Ralph L. Tapp, Marketing Programs Branch, 202/720-1115.End Further Info End Preamble Start Supplemental Information
Executive Order 12866 and 12988 and Regulatory Flexibility Act and the Paperwork Reduction Act
The Department of Agriculture (USDA) is issuing this final rule in conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have a retroactive effect.
The Act states that the statute is intended to occupy the field of promotion and consumer education involving pork and pork products and of obtaining funds thereof from pork producers and that the regulation of such activity (other than a regulation or requirement relating to a matter of public health or the provision of State or local funds for such activity) that is in addition to or different from the Act may not be imposed by a State.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under § 1625 of the Act, a person subject to an Order may file a petition with the Secretary stating that such Order, a provision of such Order or an obligation imposed in connection with such Order is not in accordance with law; and requesting a modification of the Order or an exemption from the Order. Such person is afforded the opportunity for a hearing on the petition. After the Hearing, the Secretary would rule on the petition. The Act provides that the district court of the United States in the district in which the person resides or does business has jurisdiction to review the Secretary's determination, if a complaint is filed not later than 20 days after the date such person receives notice of such determination.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). The Administrator of AMS has considered the economic effect of this action on small entities and has determined that this proposed rule will not have a significant economic impact on a substantial number of small business entities. The purpose of RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly burdened.
In the December 29, 1998, issue of “Hogs and Pigs,” USDA's National Agricultural Statistics Service estimates that in 1998 the number of operations with hogs in the United States totaled 114,380. The majority of these operations subject to the Order are considered small businesses under the criteria established by the Small Business Administration. The final rule imposes no new burden on the industry. The Act and Order have payment and collection provisions for assessments. This rule further specifies the responsibility for the collection and remittance of assessments on feeder pigs and market hogs in the regulations. This rule adds a section to the regulations to provide that the producer who sells the animal must remit to the Board the assessment due if the purchaser of a feeder pig or market hog fails to collect and remit the assessment.
In compliance with the Office of Management and Budget (OMB) regulations (5 CFR Part 1320) which implements the Paperwork Reduction Act [44 U.S.C. 3501 et seq.], the information collection requirements contained in this part have been previously approved by OMB and were assigned OMB control number 0851-0093. Start Printed Page 7282
Background and Proposed Change
The Act (7 U.S.C. 4801-4819) approved December 23, 1985, authorized the establishment of a national pork promotion, research, and consumer information program. The program was funded by an initial assessment rate of 0.25 percent of the market value of all porcine animals marketed in the United States and an equivalent amount of assessment on imported porcine animals, pork, and pork products. However, that rate was increased to 0.35 percent in 1991 (56 FR 51635) and to 0.45 percent effective September 3, 1995 (60 FR 29963). The final Order establishing a pork promotion, research, and consumer information program was published in the September 5, 1986, issue of the Federal Register (51 FR 31898; as corrected, at 51 FR 36383, and amended at 53 FR 1909, 53 FR 30243, 56 FR 4, 56 FR 51635, 60 FR 29963, 61 FR 29002, and 62 FR 26205). Assessments began on November 1, 1986.
For purposes of paying, collecting, and remitting assessments under the Order, porcine animals are divided into three categories: (1) Feeder pigs, (2) market hogs, and (3) breeding stock. Section 1230.71(a) provides that producers producing in the United States a porcine animal raised as a feeder pig, market hog, or for breeding stock, that is sold are to pay an assessment on that animal unless the producer demonstrates to the Board by appropriate documentation that an assessment was previously paid on that animal in the same category. Section 1230.71(b)(1) provides that purchasers of feeder pigs and market hogs collect assessments on these animals from the producer. Under § 1230.71 producers selling their own breeding stock must remit assessments to the Board. The Order further provides that for the purpose of collecting and remitting assessments on feeder pigs and market hogs, persons engaged as a commission merchant, auction market, or livestock market in the business of receiving such porcine animals for sale on commission for or on behalf of a producer are deemed to be the purchaser. Commission merchants, auction markets, or livestock markets who sell breeding stock on behalf of producers are required to collect and remit assessments.
Collection and remittance of assessments from sales transactions involving market hogs and breeding stock have been highly successful since the assessment collections became effective in 1986. For example, according to the Board's records, assessments are being collected and remitted on 99 percent of all market hogs slaughtered commercially in the United States each year.
Assessment collection and remittance on market hogs has been efficient and successful primarily because of the limited number of purchasers, i.e. meat packers, who purchase hogs from all sizes of production units. This centralization of collection points and their limited number facilitates remittance of assessments to the Board and reduces or eliminates compliance problems. However, in the marketing of feeder pigs, there are significantly greater numbers of purchasers which tend to complicate the collection and remittance process and increase the potential for compliance problems.
The Order contemplates that the producer (seller) will pay the assessment on feeder pigs and the purchaser, who also may be a producer, will collect the assessment due and remit it to the Board. For market hogs, the Order contemplates that the producer (seller) will pay the assessment and the purchaser will collect the assessment due and remit it to the Board.
Due to production and marketing changes within the feeder pig industry, an increasing number of high volume feeder pig production units (producers) are selling feeder pigs to large numbers of producers. Pursuant to § 1230.71(b)(1) each of these producers must collect assessments from the seller and remit them to the Board. According to the Board, many feeder pig producers, regardless of the size of their operation, simplify payment by remitting the assessment on all feeder pigs they sell to facilitate the collection and remittance of assessments. However, the large number of purchasers involved in feeder pig sales complicates the collection and remittance process and makes compliance difficult.
The primary focus concerning collection and remittance problems on feeder pigs are transactions commonly referred to as farm-to-farm sales of feeder pigs. These sales transactions typically involve two producers. Frequently, producers who purchase feeder pigs may not consider themselves to be purchasers under the Act and Order and consequently neither the seller nor the purchaser collects and/or remits assessments due. This is particularly the case in farm-to-farm feeder pig sales where producer purchasers may not consider themselves as purchasers in such transactions and therefore do not believe they are required to collect and remit assessments to the Board.
To clarify the meaning of a purchaser for the purpose of collection and remittance of assessments for the sale of feeder pigs and also for market hogs and to specify that each producer who sells an animal for the first time as a feeder pig or market hog is obligated to pay the required assessment, this rule adds a new section § 1230.113 to the rules and regulations titled “Collection and Remittance of Assessments for the Sale of Feeder Pigs and Market Hogs.” That section provides that purchasers of feeder pigs or market hogs shall collect assessments from producers if an assessment is due and shall remit those assessments to the Board pursuant to the provisions of § 1230.71. Failure of the purchaser to collect such assessment from a producer shall not relieve the producer of the obligation to pay the assessment. If the purchaser fails to collect the assessment when an assessment is due pursuant to § 1230.71, the producer (seller) shall remit the total amount of assessments due to the Board as set forth in § 1230.111. This change will facilitate enforcement of assessment collection in the Pork Promotion, Research, and Consumer Information Program.
On July 28, 1999, AMS published in the Federal Register (64 FR 40783) a proposed rule which would add a section to the regulations which implement the Order to provide that the producer who sells feeder pigs and market hogs must remit to the National Pork Board the assessments due if the purchasers of the feeder pigs or market hogs fails to collect and remit the assessments. The proposal was published with request for comments by September 27, 1999. Several comments were received—one from the National Pork Board and six from State pork producer associations. All of the comments supported the amendment. They were of the view that the amendment was a positive change, one that would enhance the remittance of checkoff on farm-to-farm sales of feeder pigs and result in easier compliance.
Accordingly, the final rule adds a new section, § 1230.113 to the rules and regulations titled “Collection and Remittance of Assessments for the Sale of Feeder Pigs and Market Hogs” which will require producers who sell feeder pigs and market hogs to remit to the National Pork Board the assessments due if the purchaser of the feeder pigs and market hogs fails to collect and remit the assessments.Start List of Subjects
List of Subjects in 7 CFR Part 1230
- Administrative practice and procedure
- Agricultural research
- Marketing agreement
For the reasons set forth in the preamble, 7 CFR part 1230 is amended as follows:End Amendment Part Start Part
PART 1230—PORK PROMOTION, RESEARCH, AND CONSUMER INFORMATIONEnd Part Start Amendment Part
1. The authority citation for 7 CFR Part 1230 continues to read as follows:End Amendment Part Start Amendment Part
2. Paragraph § 1230.113 is added to read as follows:End Amendment Part
Pursuant to the provisions of § 1230.71, purchasers of feeder pigs or market hogs shall collect assessments from producers if an assessment is due and shall remit those assessments to the Board. Failure of the purchaser to collect such assessment from a producer shall not relieve the producer of the obligation to pay the assessment. If the purchaser fails to collect the assessment when an assessment is due pursuant to § 1230.71, the producer (seller) shall remit the total amount of assessments due to the Board as set forth in § 1230.111.
Dated: February 8, 2000.
Barry L. Carpenter,
Deputy Administrator, Livestock and Seed Program.
[FR Doc. 00-3323 Filed 2-11-00; 8:45 am]
BILLING CODE 3410-02-P